Personal Liability

News & Analysis as of

CFOs Ordered to Return Bonus and Profits Due to False Financial Statements

The Securities and Exchange Commission recently ordered two former CFOs of Saba Software, Inc. to reimburse the company for stock-sale profits and bonuses accrued during the 12-month periods following its materially false and...more

How Recent Fiduciary Duty Cases Affect Advice To Directors And Officers Of Delaware And Texas Corporations

The conduct of corporate directors and officers is subject to particular scrutiny in the context of business combinations (whether friendly or hostile), executive compensation and other affiliated party transactions,...more

FCPA Compliance and Ethics Report Episode 129-Judge Rakoff, Judge Leon and Individual Prosecutions Under the FCPA [Video]

Today I discuss the book review by Judge Rakoff in the New York Review of Books, the denial of approval of the deferred prosecution agreement by Judge Leon and individual prosecutions in the FCPA....more

CFOs Agree to Sarb-Ox Clawback

Two former CFOs have agreed to return nearly a half-million dollars in bonuses and stock sale profits they received while their Silicon Valley software company, Saba Software, was committing accounting fraud. While...more

"Aggressive SEC Enforcement Approach Creates New Challenges for Resolving Investigations"

The U.S. Securities and Exchange Commission (SEC) pursued aggressive enforcement of the securities laws in the past year. Several trends related to the SEC's vigorous approach are likely to continue in 2015....more

Breaches in the Boardroom: What Directors and Officers can do to Reduce the Risk of Personal Liability for Data Security Breaches

Corporate directors and officers may increasingly be targets of shareholder derivative lawsuits in the wake of the surge of regulatory actions and private litigation around data breaches,. While no individual directors and...more

Business Litigation Reporter - February 2015

Goodwin Procter’s Business Litigation Reporter provides timely summaries of key cases and other developments within dedicated Business Litigation sessions and related courts throughout the country – courts within which...more

SEC Secures Federal Judge Order Against Mayor Based on Control Person Liability

On January 28, 2015, the United States District Court for the Eastern District of Michigan entered a final judgment against Gary Burtka, the former mayor of Allen Park, Michigan, upholding the Security and Exchange Commission...more

WHS Update: Officer liability - Exposure of directors and managers

The Model Act - New South Wales, Queensland, South Australia, Tasmania and the Territories have broadly similar WHS laws based on the model Act developed by Safe Work Australia (Model Act). Under the Model Act,...more

Inside M&A - Winter 2015

Recent U.S. Cases Highlight Liability Risks to Executives in Mining, Heavy Industrial Transactions - Historically, corporate executives rarely faced personal or criminal liability resulting from mining or environmental...more

Personal Liability for Export Violations: Civil Penalties for Individuals May be Trekking Toward You

You run a small tech company that customizes other manufacturers’ desktop and laptop computers for your customers. You can install special chipsets, encryption hardware and software, upgrade the fans and power units to make...more

2015 Trends: #7 Crime and Punishment

On the accountability and punishment front, three trends bear watching: 1) Deferred Prosecution Agreements (DPAs) DPAs and Non-Prosecution Agreements (NPAs) allow prosecutors to require corporate reforms and...more

FCPA Compliance and Ethics Report-Episode 122-with Matt Kelly on Alstom, Avon and Petrobras [Video]

In this episode, Compliance Week Editor-in-Chief Matt Kelly and I discuss the Avon and Alstom FCPA enforcement actions and then take a look at the ongoing Petrobras corruption scandal and what it means for Brazil. ...more

Changes to New York’s Wage Theft Prevention Act Eliminating the Annual Wage Notice Requirement

On December 29, 2014, Governor Andrew Cuomo signed a bill that amends the Wage Theft Prevention Act (the “WTPA”) eliminating the burdensome annual wage notice requirement that was previously placed on employers (the...more

Managing Litigation Risk: Critical Questions for Private Equity Professionals Serving on Portfolio Company Boards

Private equity funds, and individuals affiliated with fund sponsors, are increasingly being named as defendants in lawsuits involving their portfolio companies. This litigation risk arises most frequently where a fund...more

Former Compliance Officer Assessed Million Dollar Penalty For Role In Company's Money Laundering Violations

Corporate officers with compliance duties, take note: you may face personal liability for your role in failing to prevent your company's violations of federal law. This new reality comes courtesy of the U.S. Department of the...more

Staying Off the Hook - Managing the Evolving Bad-Boy Guaranty

As the financial crisis of 2008 drifts further into the rear-view mirror, the cost of capital available for commercial real estate financing is historically low and accessible, frequently coming in the “non-recourse” variety...more

SEC Seeks Serious Penalties Against Sands Brothers and its Senior Officers for Alleged Repeated Custody Rule Violations - Former...

On October 29, 2014, the SEC announced that it had instituted administrative proceedings under the Investment Advisers Act of 1940 against Sands Brothers Asset Management LLC (Sands Brothers), its two co-founders and the...more

The FCPA Year in Review: Twist and Shout (Part I of II)

We all like annual reviews and predictions for the upcoming year – it is a New Year’s rite of passage and one that brings perspective and a sense of order to our otherwise chaotic lives....more

Pow! Whack! Slam! Bam! – DOJ Finishes the FCPA Year with a Bang

Giving away my old age, we all loved the 1960s Batman series starring Adam West. Thanks to the Batman show we were given a long list of words to underscore Batman and Robin’s slugfests with the weekly villain (e.g. Penguin,...more

The liability of a trustee who honors a fraudulent exercise of a power of appointment

A trustee who transfers trust property to a permissible appointee for the benefit of an impermissible appointee such that the fraud on a special power doctrine is implicated incurs no liability as a consequence, unless the...more

Key Changes to New York's Wage Theft Prevention Act Become Law

After a delay of nearly six months, on December 29, 2014, New York Governor Andrew Cuomo signed into a law a bill (A 8106-C, S5885-B) that amends the state's Labor Law, including the Wage Theft Prevention Act (the WTPA), and...more

Employer Held Personally Liable For $1.1 Million For Back Wages And Business Expenses Of Obtaining H-1B Visas And J-1 Waivers

The United States Court of Appeals for the Sixth Circuit recently held that the owner of several medical clinics in Tennessee and Florida was personally liable for back wages, the costs of obtaining H-1B and J-1 waivers...more

A Cautionary Tale: Members of a Defunct LLC May Have Liability For Attorney Fees

In CB Richard Ellis Inc. v. Terra Nostra Consultants the California Court of Appeal for the Fourth Appellate District decided an interesting issue concerning the liability of an LLC member for a fee award imposed against the...more

Bright Petroleum, Inc. Shareholders/Officers to Pay $15,000 to Settle EEOC Retaliation Suit

Food Market Terminated Manager Who Filed Discrimination Charge, Federal Agency Charged - INDIANAPOLIS - Two shareholders/officers of the dissolved corporation Bright Petroleum Inc. d/b/a The Bright Market, will pay...more

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